"I am pleased to report that fourth quarter revenues were $306.0 million, and annual fiscal 2014 revenues were $1,156.8 million, both new all-time records for Finisar. Quarterly revenues increased by $12.0 million, or 4.1%, over the third fiscal quarter and $62.6 million, or 25.7%, over the fourth fiscal quarter of the prior year. Quarterly revenues grew for the seventh consecutive quarter. Annual revenues increased by $222.5 million, or 23.8%, over the prior fiscal year," said Jerry Rawls, Finisar's executive Chairman of the Board.

"Demand for transceivers operating at 10Gb/s and faster continued to be strong during the quarter. Demand was also strong for our transceivers for LTE wireless applications. We continue to develop and release new products, which we expect will enable Finisar to expand our market share and continue to grow revenue," said Eitan Gertel, Finisar's Chief Executive Officer.

FINANCIAL HIGHLIGHTS - FOURTH QUARTER ENDED APRIL 27, 2014

Summary GAAP Results (a)

FourthQuarterEndedApril 27, 2014

ThirdQuarterEndedJanuary 26, 2014

(in thousands, except per share amounts)

Revenues

$

306,025

$

294,018

Gross margin

31.7

%

35.9

%

Operating expenses

$

75,369

$

72,593

Operating income

$

21,560

$

33,096

Operating margin

7.0

%

11.3

%

Net income

$

28,375

$

27,061

Income per share-basic

$

0.29

$

0.28

Income per share-diluted

$

0.27

$

0.26

Basic shares

96,965

96,394

Diluted shares

105,418

104,361

Summary Non-GAAP Results (b)

FourthQuarterEndedApril 27, 2014

ThirdQuarterEndedJanuary 26, 2014

(in thousands, except per share amounts)

Revenues

$

306,025

$

294,018

Gross margin

34.2

%

37.2

%

Operating expenses

$

65,931

$

63,209

Operating income

$

38,882

$

46,295

Operating margin

12.7

%

15.7

%

Net income

$

36,992

$

44,993

Income per share-basic

$

0.38

$

0.47

Income per share-diluted

$

0.36

$

0.44

Basic shares

96,965

96,394

Diluted shares

105,418

104,361

_____________

(a)

The GAAP financial results included in this press release for the fourth quarter and fiscal 2014 do not include the impact of the amortization of acquired intangible assets in connection with the acquisition of u2t Photonics AG because the Company is in the process of obtaining a third-party valuation of such intangible assets and thus such impact has not yet been determined. The amount of such amortization of acquired intangible assets, when determined, is not expected to be material in the periods presented.

(b)

In evaluating the operating performance of Finisar's business, Finisar management utilizes financial measures that exclude certain charges and credits required by U.S. generally accepted accounting principles, or GAAP, that are considered by management to be outside Finisar's core operating results. A reconciliation of Finisar's non-GAAP financial measures to the most directly comparable GAAP measures, as well as additional related information, can be found under the heading "Finisar Non-GAAP Financial Measures" below.

Financial Statement Highlights for the fourth quarter of fiscal 2014:

Revenues increased to $306.0 million, up $12.0 million, or 4.1%, from $294.0 million in the preceding quarter.

The sale of products for datacom applications increased by $12.6 million, or 6.0%, compared to the preceding quarter.

The sale of products for telecom applications decreased by $0.6 million, or (0.7)%, compared to the preceding quarter, primarily driven by the impact of the full three months of the annual price reductions for telecom products that typically take effect on January 1st.

GAAP gross margin decreased to 31.7% from 35.9% in the preceding quarter, primarily driven by the impact of the full three months of the annual price reductions for telecom products that typically take effect on January 1st as well as the impact of the u2t Photonics AG acquisition whose products carry a lower than corporate average gross margin.

Non-GAAP gross margin decreased to 34.2% from 37.2% in the preceding quarter.

GAAP operating income decreased $11.5 million to $21.6 million, or 7.0% of revenues, compared to $33.1 million, or 11.3% of revenues in the preceding quarter.

Non-GAAP operating income decreased $7.4 million to $38.9 million, or 12.7% of revenues, compared to $46.3 million, or 15.7% of revenues, in the preceding quarter.

GAAP net income includes an approximate $8.3 million gain realized on the sale of our majority owned subsidiary Finisar Korea Ltd. during the quarter. This gain is not included in non-GAAP net income.

Cash, cash equivalents and short term investments decreased $41.7 million to $513.0 million at the end of the fourth quarter, compared to $554.7 million at the end of the preceding quarter, principally as the result of the acquisition of u2t Photonics AG, an increase in accounts receivable of $29.6 million and capital expenditures associated with the build out of the second building at our new manufacturing site in Wuxi China.

FINANCIAL HIGHLIGHTS - FISCAL YEAR 2014 ENDED APRIL 27, 2014

Summary GAAP Results (a)

Fiscal YearEndedApril 27, 2014

Fiscal YearEndedApril 28, 2013

(in thousands, except per share amounts)

Revenues

$

1,156,833

$

934,335

Gross margin

34.3

%

27.5

%

Operating expenses

$

285,496

$

262,596

Operating income

$

111,868

$

(5,555

)

Operating margin

9.7

%

(0.6

)%

Net income

$

111,412

$

(5,454

)

Income per share-basic

$

1.16

$

(0.06

)

Income per share-diluted

$

1.09

$

(0.06

)

Basic shares

95,979

92,860

Diluted shares

104,112

92,860

Summary Non-GAAP Results (b)

Fiscal YearEndedApril 27, 2014

Fiscal YearEndedApril 28, 2013

(in thousands, except per share amounts)

Revenues

$

1,156,833

$

934,335

Gross margin

35.9

%

30.9

%

Operating expenses

$

253,202

$

223,667

Operating income

$

162,341

$

65,247

Operating margin

14.0

%

7.0

%

Net income

$

157,021

$

61,255

Income per share-basic

$

1.64

$

0.66

Income per share-diluted

$

1.53

$

0.64

Basic shares

95,979

92,860

Diluted shares

104,112

99,284

_____________

(a)

The GAAP financial results included in this press release for the fourth quarter and fiscal 2014 do not include the impact of the amortization of acquired intangible assets in connection with the acquisition of u2t Photonics AG because the Company is in the process of obtaining a third-party valuation of such intangible assets and thus such impact has not yet been determined. The amount of such amortization of acquired intangible assets, when determined, is not expected to be material in the periods presented.

(b)

In evaluating the operating performance of Finisar's business, Finisar management utilizes financial measures that exclude certain charges and credits required by U.S. generally accepted accounting principles, or GAAP, that are considered by management to be outside Finisar's core operating results. A reconciliation of Finisar's non-GAAP financial measures to the most directly comparable GAAP measures, as well as additional related information, can be found under the heading "Finisar Non-GAAP Financial Measures" below.

Financial Statement Highlights for fiscal 2014:

Revenues increased to $1,156.8 million, up $222.5 million, or 23.8%, from $934.3 million in the preceding year.

The sale of products for datacom applications increased by $231.1 million, or 39.1%, compared to the preceding year.

The sale of products for telecom applications decreased by $8.6 million, or (2.5)%, compared to the preceding year.

GAAP gross margin increased to 34.3% from 27.5% in the preceding year.

Non-GAAP gross margin increased to 35.9% from 30.9% in the preceding year.

GAAP operating income increased $117.4 million to $111.9 million, or 9.7% of revenues, compared to operating loss $(5.6) million, or (0.6)% of revenues in the preceding year.

Non-GAAP operating income increased $97.1 million to $162.3 million, or 14.0% of revenues, compared to $65.2 million, or 7.0% of revenues, in the preceding year.

GAAP net income includes an approximate $8.3 million gain realized on the sale of our majority owned subsidiary Finisar Korea Ltd. during the quarter. This gain is not included in non-GAAP net income.

OUTLOOK

The Company indicated that it currently expects revenues for the first quarter of fiscal 2015 to be in the range of $320 to $335 million, non-GAAP gross margin of approximately 32%, non-GAAP operating margin of approximately 10.3% to 11.3%, and non-GAAP earnings per diluted share to be in the range of approximately $0.30 to $0.34.

CONFERENCE CALL

Finisar will discuss its financial results for the fourth quarter and current business outlook during its regular quarterly conference call scheduled for Thursday, June 12, 2014, at 2:00 pm PT (5:00 pm ET). To listen to the call you may connect through the Finisar investor relations page at http://investor.finisar.com or dial 1-877-857-6173 (domestic) or +1-719-325-4797 (international) and enter conference ID 3838782.

An audio replay will be available for two weeks following the call by dialing 1-888-203-1112 (domestic) or +1-719-457-0820 and then following the prompts: enter conference ID 3838782 and provide your name, affiliation, and contact number. A replay of the webcast will be available shortly after the conclusion of the call on the Company's website until the next regularly scheduled earnings conference call.

This press release contains forward-looking statement concerning Finisar's expected financial performance. These statements are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations, estimates, assumptions and projections about our business and industry, and the markets and customers we serve, and they are subject to numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Finisar assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from those projected. Examples of such
risks include those associated with: the uncertainty of customer demand for Finisar's products; the rapidly evolving markets for Finisar's products and uncertainty regarding the development of these markets; Finisar's historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period; ongoing new product development and introduction of new and enhanced products; the challenges of rapid growth followed by periods of contraction; intensive competition; and the uncertainty of achieving anticipated cost savings and synergies in connection with the recently completed u2t acquisition. Further information regarding these and other risks relating to Finisar's business is set forth in Finisar's annual report on Form 10-K (filed June 24, 2013) and quarterly SEC filings.

FINISAR FINANCIAL STATEMENTS The following financial tables are presented in accordance with GAAP, except that the GAAP financial results included in this press release for the fourth quarter and fiscal 2014 do not include the impact of the amortization of acquired intangible assets in connection with the acquisition of u2t Photonics AG because the Company is in the process of obtaining a third-party valuation of such intangible assets and thus such impact has not yet been determined. The amount of such amortization of acquired intangible assets, when determined, is not expected to be material in the periods presented.

Finisar Corporation

Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

Three Months Ended

Twelve Months Ended

Three Months Ended

April 27, 2014

April 28, 2013

April 27, 2014

April 28, 2013

January 26, 2014

Revenues

$

306,025

$

243,417

$

1,156,833

$

934,335

$

294,018

Cost of revenues

208,135

166,093

754,773

662,094

187,368

Impairment of acquired developed technology and other long-lived assets

-

8,156

-

8,156

-

Amortization of acquired developed technology

961

1,842

4,696

7,044

961

Gross profit

96,929

67,326

397,364

257,041

105,689

Gross margin

31.7

%

27.7

%

34.3

%

27.5

%

35.9

%

Operating expenses:

Research and development

48,132

41,270

183,355

158,784

46,734

Sales and marketing

11,509

11,056

46,547

42,347

10,911

General and administrative

15,133

6,279

53,214

45,337

14,353

Amortization of purchased intangibles

595

734

2,380

3,640

595

Impairment of purchased intangibles and other long-lived assets

-

7,602

-

12,488

-

Total operating expenses

75,369

66,941

285,496

262,596

72,593

Income (loss) from operations

21,560

385

111,868

(5,555

)

33,096

Interest income

485

211

1,319

755

335

Interest expense

(2,965

)

(544

)

(5,547

)

(2,589

)

(1,663

)

Other income (expenses), net

8,124

(154

)

7,234

(449

)

(1,873

)

Income (loss) before income taxes and non-controlling interest

27,204

(102

)

114,874

(7,838

)

29,895

Provision (benefits) for income taxes

(1,104

)

(1,506

)

3,712

227

2,827

Income (loss) before non-controlling interest

28,308

1,404

111,162

(8,065

)

27,068

Adjust for net (income) loss attributable to non-controlling interest

67

2,475

250

2,611

(7

)

Net income (loss) attributable to Finisar Corporation

$

28,375

$

3,879

$

111,412

$

(5,454

)

$

27,061

Net income (loss) per share attributable to Finisar Corporation common stockholders:

Basic

$

0.29

$

0.04

$

1.16

$

(0.06

)

$

0.28

Diluted

$

0.27

$

0.04

$

1.09

$

(0.06

)

$

0.26

Shares used in computing net income (loss) per share - basic

96,965

93,567

95,979

92,860

96,394

Shares used in computing net income (loss) per share - diluted

105,418

96,192

104,112

92,860

104,361

Finisar Corporation

Consolidated Balance Sheets

(in thousands)

April 27, 2014

January 26, 2014

October 27, 2013

July 28, 2013

April 28, 2013

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

303,101

$

374,902

$

316,488

$

288,433

$

289,076

Short-term held-to-maturity investments

209,922

179,847

-

-

-

Accounts receivable, net

225,020

195,442

186,486

171,823

149,612

Accounts receivable, other

33,749

24,274

25,890

34,386

16,538

Inventories

259,759

247,126

231,235

207,029

200,670

Prepaid expenses and other assets

33,029

22,764

20,902

19,533

18,402

Total current assets

1,064,580

1,044,355

781,001

721,204

674,298

Property, equipment and improvements, net

273,328

247,394

231,022

213,044

201,442

Purchased intangible assets, net

21,113

21,976

23,587

25,416

30,457

Goodwill

115,279

90,986

90,986

90,986

90,986

Minority investments

2,117

2,041

1,841

1,711

884

Other assets

17,272

21,034

16,946

12,954

9,780

Total assets

$

1,493,689

$

1,427,786

$

1,145,383

$

1,065,315

$

1,007,847

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

119,439

$

96,723

$

98,220

$

90,488

$

77,630

Accrued compensation

38,541

46,402

48,182

32,001

31,492

Other accrued liabilities

31,976

26,370

32,943

31,542

23,533

Deferred revenue

16,659

15,620

14,235

12,582

9,182

Short term debt

243

4,230

4,700

-

-

Current portion of convertible notes

40,015

40,015

40,015

-

-

Total current liabilities

246,873

229,360

238,295

166,613

141,837

Long-term liabilities:

Convertible notes, net of current portion

212,253

210,029

-

40,015

40,015

Other non-current liabilities

18,879

11,680

12,756

12,908

13,480

Total liabilities

478,005

451,069

251,051

219,536

195,332

Stockholders' equity:

Common stock

97

97

96

96

94

Additional paid-in capital

2,456,110

2,440,849

2,377,198

2,363,514

2,350,146

Accumulated other comprehensive income

20,025

18,980

27,315

22,397

28,525

Accumulated deficit

(1,460,548

)

(1,488,923

)

(1,515,984

)

(1,545,949

)

(1,571,960

)

Finisar Corporation stockholders' equity

1,015,684

971,003

888,625

840,058

806,805

Non-controlling interest

-

5,714

5,707

5,721

5,710

Total stockholders' equity

1,015,684

976,717

894,332

845,779

812,515

Total liabilities and stockholders' equity

$

1,493,689

$

1,427,786

$

1,145,383

$

1,065,315

$

1,007,847

Note - Balance sheet amounts as of April 28, 2013 are derived from the audited consolidated financial statements as of the date.

FINISAR NON-GAAP FINANCIAL MEASURES

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commissions: non-GAAP gross profit, non-GAAP operating income and non-GAAP income per share. These non-GAAP financial measures are supplemental information regarding the Company's operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or which occur relatively infrequently and which management considers to be outside our core operating results. Some of these non-GAAP measures also exclude the ongoing impact of historical business decisions made in different business and economic environments. Management believes that tracking non-GAAP
gross profit, non-GAAP income from operations, non-GAAP net income and non-GAAP net income per share provides management and the investment community with valuable insight into our current operations, our ability to generate cash and the underlying business trends which are affecting our performance. These non-GAAP measures are used by both management and our Board of Directors, along with the comparable GAAP information, in evaluating our current performance and planning our future business activities. In particular, management finds it useful to exclude non-cash charges in order to better correlate our operating activities with our ability to generate cash from operations and to exclude certain cash charges as a means of more accurately predicting our liquidity requirements. We believe that these non-GAAP measures, when used in conjunction with our GAAP financial information, also
allow investors to better evaluate our financial performance in comparison to other periods and to other companies in our industry.

In calculating non-GAAP gross profit in this release, we have excluded the following items from cost of revenues in applicable periods:

In calculating non-GAAP operating income in this release, we have excluded the same items to the extent they are classified as operating expenses, and have also excluded the following items in applicable periods:

Gain or loss on litigation settlements and resolutions and related costs (non-recurring cash charges or benefits);